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5 questions with Sallie Krawcheck, founder of Ellevest

Former Wall Street exec speaks at Leeds as platform launches in Denver, Boulder

By Shay Castle

Staff Writer

Posted:
07/30/2016 08:00:00 AM MDT

Sallie Krawcheck, center, chats with attendees to a July 13 launch party for her female-focused investment platform, Ellevest, at Union Station in Denver. (Courtesy photo)

Sallie Krawcheck sees a gender gap in America, one that's even more costly than the pay gap: The investment gap.

That's why she started Ellevest, an invite-only, female-focused digital investing platform that recently launched in Denver and Boulder.

We caught up with the former Wall Street executive, fresh off a talk at CU's Leeds School of Business, to learn more:

What do you think is keeping women from investing?

A lot of it is the language: The sports analogies. The war analogies. It's all presented as how to outperform and pick the winners.

What the research shows is that the winning doesn't motivate us. Beating the markets, picking the winners is clearly not enough to motivate us.

And attempts to attract women to investing are so misguided. It's the old message, 'Don't buy shoes, invest instead,' or trying to appeal to our emotions.

The women we're talking to are like, 'Yeah, I know I have emotions around money and I don't care. I want to know what to do with my money.'

I would hypothesize that the reason Wall Street and the big banks have not been successful (in reaching women) is that they have been women's initiatives refracted through the brain of the man.

What does motivates women to invest?

I think it's talking about our goals in life, the idea of 'This is the life I want to lead, and this is how I'm going to get there.'

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Something that also can motivate women to invest is investing their values, having something that is important to them in life then putting their money behind it.

How does Ellevest provide that?

Ellevest is a digital investment platform, but it's really more of a digital financial planning and investment platform. It's a full financial plan that calculates how much you should put aside to have a baby or buy a house — whatever it is you want.

We'll put together a highly individualized investment portfolio and plan to get you to your goal. If you fall off track — say you didn't make two of your planned $1,000 deposits — we reach out and say, 'You're off track and here's what you need to do to get back on track: Either invest more money, retire a year later, etc.'

Then your work goes from trying to research, 'What is a mutual fund? What is large cap? What is alpha?' to 'What do I want to do and what do I need to do to get there?'

How much does the pay gap play into the investing gap? Do women maybe just not make enough money to invest?

Lots of women think they don't make enough. But if you've paid off your credit card debt, you're ready to invest. Put aside whatever you can: 1 percent, 2 percent. Then work your way up to saving double digit percentages.

Invest in a diversified investment portfolio. Do it steadily so you ride the market's ups and downs. Don't check it often, but when you check it over time, you'll get returns.

Do you think some of this is generational and therefore likely to change?

It is generational. Women who are of a certain age, their husbands not only earn the money, they control it. My mother's generation, some women got an allowance from their husbands and that was it.

In your generation, (millennials) you're seeing women much more in control of their finances but they're still not investing.

When's the last time you went to a party and you heard a woman say she bought this stock vs. that stock? The industry remains so by men for men.

Without our stepping in and looking to change things, I just couldn't sleep at night if I just said, 'Oh, they'll get there' and I didn't try to do something.

I've had this amazing career so it seems like it's my responsibility. If all I do is draw attention to the gender investment gap, I'm going to feel very good about it.

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